Bloomberg analyzed that Secretary of State John Blinken’s trip to Asia last week and his talks with top officials in mainland China underscored the Biden administration’s strategy of joining Indo-Pacific allies to encircle mainland China, and that mainland China is not an ally, but if Beijing is isolated from the U.S. and its allies for a political victory, it could pay a huge economic price.
At the opening event of the talks, there was a significant shift in tone on both sides. The U.S. side openly and directly criticized mainland China’s human rights stance, and the Chinese side abandoned its “hiding behind the light” attitude since Deng Xiaoping and instead adopted a forceful approach.
On the optimistic side, the public statements by Chinese officials may be an attempt to gain support from the domestic public, and the U.S. and China may still make progress in closed-door meetings.
Economists point out that Secretary of State John Blinken chose to meet with Japan and South Korea and other allies last week before meeting with top Chinese officials in Alaska, sending a clear message that the U.S. will prioritize its allies and that mainland China is not an ally.
Bloomberg economists estimate that if mainland China is isolated from the U.S. and its allies, potential growth will drop steeply to 1.6% in 2030.
The CCP’s position may be that a political victory is more important than the potential economic cost, but that does not mean the economic cost is not significant.
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